Human rights organisation Justice has made 27 recommendations to improve the scheme, including calling for it to be taken off the department and run independently of government.
The Reforming the Windrush Compensation Scheme report, published on Monday, also found claimants are not receiving adequate payouts and are typically having to hand lawyers up to 30 per cent of what they do get because the claims system is so convoluted they need legal advice.
Caseworkers were also said to lack cultural understanding, with complaints of some being disrespectful, unhelpful or even lacking knowledge of the scheme.
Around 15,000 victims of the Windrush Scandal were said to be eligible for the scheme when it launched in April 2019. As of October this year, only 864 have received payouts. As of May, at least 21 had died before their claims were processed.
In March, Justice put together a working group of claimants and legal experts, led by Professor Robert Thomas of the University of Manchester, to scrutinise the scheme.
“The scheme is intended to compensate victims of Home Office failings,” the report states. “There is therefore an inherent lack of independence in the Home Office having responsibility for administering the scheme and for determining whether they themselves should pay compensation.
“In circumstances where fear and mistrust of the Home Office continues to run deep among victims and spans multiple generations, the inherent lack of independence in this approach has seriously undermined the aims of the scheme and is a major factor in the lower-than-expected number of applications.”
The report also found there are delays and inconsistencies in decision-making and there is no effective appeals process.
Other recommendations include providing legal funding for all successful claimants and training caseworkers on decision-making, communication with vulnerable people, mental health, and cultural understanding of people from different communities.
Payouts should also reflect all losses suffered by the victims, the group said, including pension losses, as well as an increased amount for anyone who has experienced homelessness.
An improved appeals process and a publicity campaign to raise awareness of the scheme were also recommended.
Working group chair Professor Thomas said: “We have real concerns about its [the scheme’s] operation that can mean people who have suffered real harm because of the Windrush scandal are not able to get compensation. We have produced a set of informed recommendations designed to resolve many of the problems.”
The Windrush scandal broke in 2018 when it emerged hundreds of British and Commonwealth citizens had been detained, deported, and denied legal rights after wrongly being classified as illegal or undocumented immigrants.
In May the National Audit Office (NAO) published a report into the scheme that showed claimants were waiting five times longer for payouts than the Home Office had anticipated.
Justice’s acting legal director Stephanie Needleman said: “The Windrush compensation scheme should provide a valuable lifeline for those who have suffered losses and hardships, however, there are concerning weaknesses in its current administrative and procedural processes.
“Through these recommendations, we hope to see structural changes to improve processes, ensuring those who have suffered are treated with dignity and receive the compensation they are due.”
Responding to the report, he told The Big Issue: “This builds on the concerns raised over the last few years by campaigners, lawyers and victims about the inappropriateness of the Home Office running the scheme.
“Ultimately it’s about Priti Patel now recognising this. The community has made it very clear we don’t trust the Home Office to manage the scheme. The home secretary now needs to do the right thing and start the process of finding a new agency to manage it so confidence can be restored and justice given.
“It’s imperative – too many people have died without receiving compensation.”
The Home Office said it had already simplified the claims process and brought in new support measures for those claiming on behalf of relatives who have died. The scheduled end date for the scheme has also been removed and more caseworkers are being hired.
A spokesperson said: “The home secretary has been resolute in her determination to ensure everyone affected by the Windrush scandal receives the full compensation to which they are entitled.
“We are pleased this report welcomes the significant improvements we have made to the scheme, including its overhaul last December. Since then the amount of compensation paid has risen from less than £3million to over £31.6m, with a further £5.6m having been offered.
“Many of the issues raised in this report are already being addressed and several recommendations have previously been considered.
“For example, we continue to firmly believe that moving the operation of the scheme out of the Home Office would risk significantly delaying vital payments to those affected. However, we are always open to making further improvements and will reflect carefully on the report’s findings.”